Question
BS Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the
BS Ltd. is a public corporation and issues $200,000 8% convertible three-year bonds for $224,000. Each $2,000 bond is convertible at the option of the investor into 20 no-par value common shares of BS Ltd. on maturity. At the date of issue, similar type non-convertible bonds of BS Ltd. are selling for $204,000. The bond premium recorded on issue is: (2 marks)
| A. | $24,000 | |
| B. | $20,000 | |
| C. | $4,000 | |
| D. | $0 |
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Financial Analysis
Authors: Paul Rodgers
4th Edition
075068674X, 978-0750686747
